By Mary Welch

NanoSystems LLC and Merck & Co. Inc. entered a $30 million license agreement — their third — under which NanoSystems will develop a formulation to improve the delivery of one of Merck's poorly water-soluble drugs.

"This deal represents another step in our collaboration with an outstanding pharmaceutical company," said Larry Sternson, president and CEO of King of Prussia, Pa.-based NanoSystems. He said he expects more deals with Merck "in the coming months."

Sternson would not disclose what type of drug Merck is developing, nor its indication. He did say the $30 million represents a "significant" up-front payment, along with fees based on technology and regulatory milestones. In addition, NanoSystems will receive royalties on sales of any products made using its technology.

NanoSystems' NanoCrystal system allows the conversion of a drug ingredient to a stable, small-particle crystalline form, improving the drug's delivery efficiency and performance while keeping it physically identical to classical dosage forms. NanoCrystals are stabilized by the adherence of selected polymers onto their surfaces. Each NanoCrystal is less than 400 nanometers in diameter, a nanometer being one billionth of a meter. (See BioWorld Today, May 16, 1997, p. 1.)

NanoCrystal technology formulates active pharmaceutical ingredients for use in traditional dosage formats, including oral, injectable, aerosol and topical products. Reduced to particle form, the drugs show enhanced bioavailablity, faster onset of action and elimination of food effects. The formulation also means improved safety and better patient compliance.

Process Can Rescue Struggling Drug Candidates

"Sometimes companies like Merck have promising drugs that they may not be able to develop because they can't formulate them effectively," Sternson said. "Finding a solution to this problem often requires identifying a totally new drug candidate. NanoCrystal technology provides a means by which such molecules can be rescued and their development pursued."

NanoSystems' first collaboration with Merck, of Whitehouse Station, N.J., began in late 1996 and involved a formulation of Merck's protease inhibitor, indinavir, for the treatment of HIV in pediatric patients and other special patient groups. The second, inked in the summer of 1997, focused on an unspecified drug.

Also last year, NanoSystems signed a deal with Wyeth-Ayerst Laboratories, a Philadelphia-based division of American Home Products Corp., to develop a more water-soluble formulation of Wyeth-Ayerst's immunosuppressant drug, Rapamune. (See BioWorld Today, May 16, 1997, p. 1.)

NanoSystems began in 1994 as a business unit of Sterling Winthrop Inc., of New York, a subsidiary of Eastman Kodak Co., of Rochester, N.Y. Following the divestiture of Kodak's health care businesses, NanoSystems become an independent, privately held company in 1995. *